New Direction for Energy Independence, National Security, and Consumer Protection Act and the Renewable Energy and Energy Conservation Tax Act of 2007

Floor Speech

NEW DIRECTION FOR ENERGY INDEPENDENCE, NATIONAL SECURITY, AND CONSUMER PROTECTION ACT AND THE RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT OF 2007 -- (Senate - April 09, 2008)

Mr. DeMINT. Mr. President, if I may, I will mention a few things about the amendment. I am, obviously, disappointed that a germane amendment cannot even be brought up in this debate. A part of this housing package is a $4 billion title III section that we are referring to as community development block grants. Many people here support those.

I wish to make clear to my colleagues this is not a normal block grant. What it is--in the name of helping homeowners who have lost their homes, this $4 billion goes to selected areas of the country where there has been the highest concentration of foreclosures. What it actually does is use taxpayer dollars to buy homes from banks. The banks have taken these homes from former homeowners. This money doesn't help the people who have lost their homes. It takes taxpayer money from all over the country and bales out the banks that now hold this. What we are going to end up with is this money that goes through States down to local communities, through the block grant process, to local communities themselves or through an intermediary who is actually buying private property now owned by the banks, and we are spending money to fix those homes up and then to sell them, the local communities--we are helping to make them property owners.

The bill, as written, does not prevent them from keeping the property as rental property. This will not only spend $4 billion, it will not necessarily do it in an equitable way around the country. It doesn't help homeowners who have lost their homes. In fact, it may hurt the homeowners who don't get the benefit of Government money to fix up their homes. They don't get bailed out if they cannot make their payments. What we are faced with is the Government fixing up a home. We are giving someone a tax credit to buy that home but not the one for sale next to it.

We know this process of how block grants work, and these have been deemed one of the least-effective programs by the General Accounting Office and other Government agencies that looked at this. We are going to funnel money from here to the States, to the local communities, to the banks, and the transactional costs to move these homes and to fix them up is going to probably be more than any value from it. We put responsible homeowners at a disadvantage in this package.

I encourage my colleagues to look at this whole bill. First of all, look at the process. If we cannot have a germane amendment postcloture--which was promised when this bill was brought up--and we cannot strike a large provision such as this, which is clearly not in the interest of those who are hurting; it is obviously bailing out banks who have made bad loans, what this will ultimately do is encourage banks to foreclose on homes they might not have because they know they are going to get the Government to buy that home if they take it from the homeowner.

The perverse incentives built into this plan need to be thought through. There is no way this will work to help those who have been hurt. It is throwing the money into the wrong places and making homeowners out of local communities in an inequitable way in this country.

It is unfortunate we are not allowed to up bring this amendment and vote on it in a fair and open process. Nevertheless, I appreciate the opportunity to speak, and I appreciate the chairman's indulgence today.